As the UAE’s role as a centre for international business and private wealth continues to grow, choosing the right legal structure is becoming an increasingly important part of corporate and wealth planning.

SPVs, holding companies and foundations are commonly considered as part of that process. While they can sometimes be used together, they serve different purposes, so the right choice depends on what is being structured and what the owner needs it to do.

Using an SPV to separate assets and asset protection

A Special Purpose Vehicle (SPV), is generally established around a specific asset, investment or transaction rather than to run an active trading business because they are passive holding entities.

An investor might use an SPV to own a property, for example, keeping that asset within its own legal entity, separate from other investments or business activities, and allowing for separate asset protection and risk isolation. The same approach can be used for intellectual property, a joint venture or a particular investment where there is a reason to keep ownership and liabilities separate.

That narrower purpose is one of the main differences between an SPV and a conventional holding company. An SPV will usually hold one asset or a limited group of related assets, while its shareholders or parent entity remain identifiable within the wider ownership structure.

In the UAE, ADGM SPVs and DIFC Prescribed Companies are among the vehicles used for this purpose. Which is appropriate will depend on the asset, its ownership and the wider structure around it.

Bringing businesses under a holding company 

Once an entrepreneur owns several businesses or investments, keeping each one directly under individual ownership can become cumbersome. A holding company provides a central ownership layer, with the shares in the underlying businesses held beneath it.

An entrepreneur with operating companies in the UAE, Saudi Arabia and the UK could, for instance, place those companies beneath one holding company. Rather than changing the underlying businesses, this brings their ownership together at group level.

It can also provide a central point for tax planning purposes, receiving dividends and investing capital back into subsidiaries. Depending on its jurisdiction, licence and activities, a holding company may have employees or premises and can have greater operational substance than a passive SPV. Operational holding companies are most common in Abu Dhabi Global Market, under the activity ‘Operating Holding Company’. The typical purpose for setting up this type of structure is to expand the parent company’s international operations and facilitate the relocation of the Managing Director to Abu Dhabi to oversee and manage the regional business activities from within the UAE, typically for tax efficiency purposes.

Holding companies can be established in ADGM, DIFC and other UAE free zones. The appropriate location depends on what the group owns, how it operates and its tax and commercial position.

Where a foundation fits into family wealth interests

A foundation approaches ownership differently because it has no shareholders. It is an independent legal entity established by a founder and governed by a council under its constitutional documents.

That distinction becomes useful where the objective extends beyond organising a business group. A family may want its companies and investments to remain together after the founder’s lifetime, with an agreed framework governing how those assets are held for future generations.

The foundation does not need to replace the corporate structure beneath it. It can instead own the holding company, allowing the businesses to continue operating through their existing corporate structure while long-term ownership sits within the foundation.

For families with businesses and investments across several countries, this can connect succession planning with the way those assets are already owned. The UAE does not levy any federal inheritance tax, estate duty, or wealth tax on assets held personally or transferred through a foundation, although tax, inheritance and other rules in the countries concerned still need to be considered as part of the wider arrangement.

Is using the structures together a natural fit?

The choice is not always between an SPV, a holding company or a foundation. Each can perform a different role within the same structure depending on the personal and business interests of the investor.

A family foundation might sit at the top, with a holding company beneath it owning the family’s operating businesses. Separate SPVs could then hold a property or investment where keeping that asset apart serves a genuine purpose.

The result is a layered structure, but each layer has a specific job. The foundation deals with long-term ownership and succession. The holding company brings the corporate structuring interests together, while an SPV can separate an individual asset or investment from the rest.

That does not mean a more complicated structure is automatically better. Each additional entity brings administration, accounting and other ongoing obligations. An entrepreneur with one property may have little reason to establish a full holding structure, just as a business owner with companies across several countries may find a single SPV too limited for what they need.

The structure also has to work after it has been established. Creating an SPV or foundation without transferring the intended shares or assets into it leaves the ownership arrangement incomplete.

Key considerations for choosing the appropriate structure 

The useful starting point is the assets themselves and what the owner needs the structure to achieve.

Where the requirement is to separate a particular investment or asset, an SPV may be sufficient. As several businesses come under common ownership, a holding company can provide a clearer group structure. Where the concern extends to how family wealth will be owned and passed on in the future, a foundation can provide the long-term framework above those corporate interests.

More complex families and business groups may have reasons to use all three, but complexity should follow the need rather than come before it. A structure works best when every entity has a clear purpose and the ownership arrangements reflect how the assets are intended to be managed over time.

How Sovereign can support UAE corporate structuring

Sovereign works with business owners, investors and international families on corporate and wealth structures across the UAE.

Our corporate structuring, tax and fiduciary teams can consider the assets involved and the owner’s longer-term plans before determining whether an SPV, holding company, foundation or combination of structures is appropriate. Where several entities are involved, we can also help coordinate how the different parts of the structure work together.

Sovereign can support the establishment and ongoing administration of SPVs, holding companies and foundations across jurisdictions including ADGM, DIFC and RAK ICC, together with the related corporate, annual accounts and tax requirements.

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DIFC has expanded its Prescribed Company regime under new regulations enacted on 24 July 2026, removing the previous eligibility requirements for establishing SPVs.

Prescribed Companies are now open to any applicant, although most will need to appoint a DIFC-licensed Corporate Services Provider (CSP).

Who can now establish a DIFC Prescribed Company?

Previously, an applicant had to meet one of the qualifying routes in the regulations, such as having certain connections to DIFC or the GCC or establishing the company for a specified qualifying purpose.

With those restrictions removed, investors can now consider a DIFC Prescribed Company on the basis of whether it suits the structure they want to create.

This opens the regime to families, investors and international groups whose proposed structures may not have qualified previously. The question now is whether a Prescribed Company is suitable for what they want to do.

What can a Prescribed Company be used for?

It remains a passive holding and structuring vehicle for uses such as holding assets or investments, family or corporate ownership structures and financing arrangements.

As a passive vehicle, it cannot employ staff or carry on normal business operations, while any use in connection with Financial Services remains subject to the relevant DFSA rules.

So while access to the regime is much wider, the purpose of the vehicle has not changed.

Most PCs will need a Corporate Services Provider

DIFC prescribed company regulations require the appointment of a DIFC-licensed CSP in most cases.

The CSP handles the company’s main administrative dealings with the DIFC Registrar of Companies, including filings and record keeping. It can also provide the PC’s registered office in DIFC, so the company does not need to lease its own premises.

Exemptions from the mandatory CSP requirement mainly cover PCs controlled by certain DIFC-registered or regulated entities, government entities or publicly listed companies.

For other applicants, appointing a CSP is now part of using the Prescribed Company regime.

What does an existing prescribed company need to do?

The CSP requirement also affects Prescribed Companies that were established before the new regulations took effect.

Existing PCs first need to establish whether they qualify for an exemption. If they do not, they have six months from 24 July 2026 to appoint a DIFC-licensed CSP, giving them until 24 January 2027.

A PC that already uses a DIFC-licensed CSP may require little practical change, but the existing arrangement should be checked against the new requirements.

Failure to appoint a CSP where required can result in a fine of up to USD20,000. The Registrar can also revoke the company’s Prescribed Company status.

What does the change mean for new structures?

For new applicants, the main effect is greater choice. A family considering a DIFC vehicle to hold investments, for example, no longer needs to fit the structure within one of the previous eligibility routes. The same applies to international investors considering a PC as part of a wider ownership structure.

The vehicle still needs to suit its intended purpose. If the company will employ people or carry out normal business operations, a Prescribed Company will generally not be appropriate.

The tax position also needs to be considered on its own facts. Opening the PC regime to more applicants does not create a new UAE Corporate Tax treatment or guarantee a particular international tax outcome.

The change is therefore a significant expansion of who can use a DIFC Prescribed Company, rather than a change in what the vehicle itself is designed to do. For existing PCs, the more immediate question is whether a CSP must be appointed before 24 January 2027.

Support for DIFC PC

Sovereign PPG are a registered corporate service provider in the DIFC. We support new and existing DIFC prescribed companies, family offices and all types of private and commercial entities. As a CSP we provide services for ongoing corporate administration, company’s ongoing governance to align with DIFC companies law and a broader range of services through the establishment process, maintaining accounting records and company structuring.

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The UAE’s position as a centre for private wealth continues to strengthen, and Dubai has become a leading hub for family offices because of its financial infrastructure. In practice, a family office in Dubai is a structure through which a family owns, manages and protects its assets, combining wealth management, long-term decision making and succession planning in one place. Recent estimates suggest family office assets under management could approach US$740 billion by 2030, while the DIFC reported more than 1,280 family-related entities in 2025. The largest family groups operating from the centre oversee more than US$1.2 trillion globally.

Those figures suggest that something more significant is taking place than a simple flow of investment capital. Increasingly, high-net-worth families and individuals are moving the structures through which wealth is owned and managed, bringing succession planning, ownership frameworks and long-term decision making with them.

This is increasingly becoming a story of capital migration rather than capital mobility. A decade ago, many families viewed a presence in the UAE as a useful addition to existing arrangements elsewhere. Today, a growing number are establishing family offices, whether for a single family or across multiple families, and relocating decision-making functions to the UAE. For families considering whether to establish or relocate a family office to Dubai or the wider UAE, the key questions are why this jurisdiction is attracting long-term wealth structures, how centres such as DIFC and ADGM support them, and how Sovereign helps put those arrangements in place for future generations.

What begins as an investment relationship often develops into broader wealth management services around ownership, governance, and succession. Once a family starts spending more time in the country and making decisions from the region, questions about ownership and succession tend to follow.

This is particularly relevant where wealth has been accumulated over many years and across multiple jurisdictions because it tends to be spread across structures that were established at different points in time, often requiring financial planning across changing family circumstances. As families become more internationally connected, those arrangements frequently come under review to define objectives, build a long-term plan, and reflect wider life goals.

Families want clarity about what happens next, and succession planning is a core family-office function, including whether their ownership framework will remain effective as the next generation becomes involved. Some families choose a single-family office for greater control.

Foundations have become increasingly popular in this context because of the continuity they can provide and the availability of these regimes within both DIFC and ADGM. Family governance may also include a family constitution or family charter with decision-making protocols, and philanthropy is often managed through foundation structures.

The UAE’s success as a wealth hub is not based on a single factor but on the confidence families have in the country’s long-term direction and institutional framework.

The Dubai International Financial Centre and ADGM have played an important role in that. The Dubai International Financial Centre offers a common-law framework and specialized legal frameworks for family wealth management that are familiar to international investors and advisers. Over time, this has helped create confidence around long-term planning and wealth structuring.

Dubai Multi Commodities Centre also provides a regulatory environment for family offices. Establishing a family office involves selecting the right jurisdiction and legal structure, with advice from local professionals who understand local regulations and can coordinate the necessary services. At the same time, growing inflows of high-net-worth individuals continue to reinforce demand for sophisticated wealth planning solutions. Families arriving in the UAE are often looking beyond immediate investment opportunities. They are considering where future decisions will be made and how ownership should be structured for the years ahead.

The rise of family wealth structures in the UAE reflects the country’s growing role as a long-term base for internationally mobile families, supported by favorable tax regulations and specialist expertise.

For many, the challenge is no longer access to opportunities but creating arrangements that can endure as families, assets and jurisdictions become increasingly interconnected, while still meeting UAE regulatory and economic substance requirements.

The ability to bring these considerations together within a single planning framework through an integrated approach is becoming increasingly important.

For more than 35 years, Sovereign has helped families with wealth management services for family offices, including structures that support long-term ownership and succession planning.

From UAE foundations to wider family wealth arrangements, we work with clients to create frameworks that provide clarity today and continuity for future generations, with key services including investment oversight; this approach combines strategic investment planning with managing risks through tailored strategies shaped around your financial goals. Advice can also be built around a holistic plan covering liquidity, longevity and legacy, supporting retirement planning and education.

For further information on family wealth structures in the UAE, or to discuss your own planning requirements, please contact Sovereign for support designed to help you achieve your financial goals and protect your financial future.

The post The Rise of Family Offices and Wealth Structures in the UAE appeared first on The Sovereign Group.

The UAE’s tax landscape continues to evolve, with corporate tax now firmly established and e-invoicing set to transform how businesses manage compliance and reporting. Join our experts for a practical webinar exploring the latest corporate tax developments alongside the upcoming e-invoicing requirements expected to take effect from September 2026.

Date: Wednesday, 19 August 2026

Time:  1PM DUBAI | 5PM HONG KONG | 10AM UK

Format: Online | Free to attend

We’ll discuss what businesses need to know, how e-invoicing will impact finance and tax functions, key implementation considerations, and the steps organisations should take now to prepare for a smooth transition.

RSVP Here

This webinar is for:

• CFO/ Finance leaders
• Tax professionals
• Business owners

This session will provide valuable insights to help your organisation stay compliant and future-ready.

RSVP Here

The post LIVE Webinar – UAE Corporate Tax & E-Invoicing Readiness: Prepare for the September Deadline appeared first on The Sovereign Group.

Contributing Author: Sameer Ansari – Senior Client Accountant

The UAE continues to strengthen its position as one of the world’s leading jurisdictions for private wealth structuring, succession planning, and family governance. With the UAE Federal Tax Authority (FTA) recently issuing an updated Corporate Tax Guide on the taxation of Family Foundations, wealthy families and their advisors now have greater clarity on how these structures will be treated under the UAE Corporate Tax regime.

While the new guidance does not fundamentally change the existing framework, it addresses several practical questions that have emerged since the introduction of Corporate Tax and provides important insights for families using foundations, trusts, holding companies, and family offices as part of their long-term wealth planning strategy.

Greater Certainty for Family Wealth Structures

Family Foundations have become an increasingly popular vehicle for preserving wealth across generations, protecting assets, and establishing robust governance arrangements. The latest guidance demonstrates the FTA’s growing understanding of the complexities often found within modern family wealth structures.

One of the most welcome developments is the additional clarity provided on trusts and similar arrangements.

The FTA has confirmed that certain trusts and similar contractual arrangements may qualify for tax-transparent treatment where the relevant conditions under Article 17 are met, reinforcing the viability of trust-based succession planning structures within the UAE framework. The June 2026 guidance further refines the description of the roles of settlors, trustees, and beneficiaries without altering the core tax treatment.”

At the same time, the guidance draws a clear distinction between Family Foundations and ordinary limited liability companies. While LLCs remain useful holding vehicles, the FTA has confirmed that they cannot themselves be treated as Family Foundations. This distinction is important for families reviewing older structures that may have been established before Family Foundations became widely available in the UAE.

The Reality of Modern Family Structures

Today’s family wealth structures rarely consist of a single entity. More often, they involve multiple holding companies, investment vehicles, trusts, and operating businesses spread across various jurisdictions.

Recognising this reality, the FTA has expanded its guidance on multi-tier ownership arrangements and, importantly, provided confirmation that qualifying tax-transparent treatment can extend through multiple layers of entities. However, this benefit is subject to strict conditions.

The concept of an “uninterrupted chain” now sits at the centre of the analysis. In simple terms, every entity between the Family Foundation and the underlying asset-holding company must itself qualify for tax-transparent treatment. A single non-qualifying entity can disrupt the chain and potentially affect the tax status of entities below it. Each entity in the chain must separately meet the conditions required for a foundation to be tax transparent. Entities in the chain do not need identical financial years but If conditions fail mid-period, transparency is lost from the start of that period for the entity and its subsidiaries.

For families with complex structures accumulated over many years, this may be an opportune moment to undertake a comprehensive review to ensure that existing arrangements continue to achieve the intended tax and succession outcomes.

The FTA has also acknowledged a practical reality often seen in larger family groups: ownership shared among multiple Family Foundations. The guidance confirms that a company may still qualify for tax-transparent treatment where ownership is split between qualifying Family Foundations, provided the ownership and control requirements are satisfied.

Transferring Assets into a Family Foundation

Another area that has attracted considerable attention is the transfer of assets into Family Foundations.

Founders are frequently concerned about whether moving investment portfolios, real estate, or other personal assets into a Family Foundation could trigger an unintended tax charge.

The updated guidance provides welcome comfort by confirming that where an individual transfers personal investments or real estate investment income into a Family Foundation, there should generally be no UAE Corporate Tax consequences for the founder.

This clarification will be particularly relevant for entrepreneurs and business owners who are considering formalising their succession plans through the use of a foundation structure.

Corporate founders, however, should proceed more carefully. Transfers by corporate entities (which are Taxable Persons) may give rise to taxable gains or losses depending on the circumstances. Where the transfer is between related parties, it must be conducted at arm’s length terms in accordance with transfer pricing rules.

A Useful Clarification on Tax Status Changes

One of the more technical but highly significant points addressed by the FTA concerns companies entering or leaving Family Foundation structures.

The guidance confirms that where a company changes its tax status—for example, becoming tax transparent after being acquired by a Family Foundation—there is no corresponding reset of the tax cost of its underlying assets.

Although this may appear to be a minor technical point, it removes a layer of uncertainty that could otherwise have complicated future disposals and tax calculations.

For families engaged in long-term estate and succession planning, predictability is often just as valuable as tax efficiency.

Importantly, pre-existing entities acquired by a Family Foundation can subsequently qualify for transparent treatment (there is no requirement that they have been wholly owned from inception), provided all conditions are met going forward. Changes in ownership that cause an entity to enter or exit transparent status do not trigger a deemed disposal or reacquisition of assets.

What About Family Offices?

Family offices continue to play an increasingly important role within the UAE’s private wealth ecosystem, particularly in jurisdictions such as DIFC and ADGM.

The FTA has confirmed that family offices generally should not expect to qualify for the same tax-transparent treatment available to Family Foundations. This is largely because family offices typically carry on commercial activities and generate fee income. As a result, they remain subject to Corporate Tax in the ordinary course.

Single Family Offices managing assets solely for one family are also unlikely to meet the regulatory oversight requirements needed to access the 0% Corporate Tax rate on Qualifying Income in Free Zones. Extending services to third parties may recharacterize the entity as a Multi-Family Office and alter its licensing status. Arm’s length transfer pricing rules apply to any services provided to related parties or Connected Persons.

The latest FTA guidance reflects the continuing evolution of the UAE’s private wealth landscape. More importantly, it demonstrates a willingness by the authorities to provide practical clarification on issues that matter to families, founders, trustees, and family offices.

For many families, the publication serves as a timely reminder that succession planning, governance, and tax structuring should not be viewed as static exercises. As regulations continue to evolve, periodic reviews of existing structures remain essential.

The UAE remains one of the most attractive jurisdictions globally for family wealth planning. However, the greatest benefits are typically achieved when legal, governance, and tax considerations are considered together as part of a broader long-term strategy designed to preserve wealth across generations.

Why Family Foundations Continue to Attract Private Wealth & Corporate Tax

One of the most attractive features of a UAE Family Foundation is the possibility of achieving tax transparency under Article 17 of the UAE Corporate Tax Law.

Contrary to a common misconception, a Family Foundation is not automatically exempt from Corporate Tax. As a separate legal person, a foundation would ordinarily fall within the scope of Corporate Tax in the same way as any other juridical person. However, where the foundation satisfies the requirements of Article 17 and receives approval from the Federal Tax Authority (FTA), it may elect to be treated as  a tax transparent foundation for UAE Corporate Tax purposes. In practice, this means that the foundation itself is treated as fiscally transparent and is generally not subject to Corporate Tax in its own right. Instead, the underlying assets and income are effectively looked through to the founder and beneficiaries.

To qualify for this treatment, the Family Foundation must satisfy several key conditions on an ongoing basis.

First, the foundation must be established for the benefit of identified or identifiable natural persons, a public benefit entity, or both. This allows structures to benefit current and future generations of a family while also accommodating charitable objectives.

Second, its principal activity must be limited to receiving, holding, investing, preserving, distributing, or otherwise managing assets and wealth associated with savings and investments. The regime is intended for wealth preservation vehicles rather than operating businesses.

Third, the foundation must not conduct activities that would constitute a business if those activities were carried out directly by the founder or beneficiaries. This is a critical requirement and one that many families should review carefully, particularly where operating companies sit alongside investment assets within the same structure.

Fourth, the principal purpose of the structure must not be the avoidance of Corporate Tax. The FTA has made clear that Family Foundations are intended to facilitate genuine succession planning, asset protection, family governance, and long-term wealth preservation rather than artificial tax planning arrangements.

Finally, where public benefit entities are included as beneficiaries, additional distribution requirements must also be satisfied.

For many entrepreneurial families, these requirements are not particularly restrictive. In fact, most properly structured Family Foundations established for succession planning, asset protection, family governance, and investment holding purposes will naturally align with the legislative intent behind Article 17.

The result is a powerful planning tool that allows families to centralise ownership of investments, real estate, operating businesses, and other strategic assets within a governance framework designed to preserve wealth across generations while maintaining tax efficiency for the UAE Corporate Tax regime.

Sovereign Group is licensed to establish and administer Foundations in both DIFC and ADGM and provides comprehensive private client services for high-net-worth individuals, family businesses, and family offices. Our multidisciplinary team assists clients with Foundation formation, ongoing administration, governance arrangements, accounting and bookkeeping services, Corporate Tax registration and filings, economic substance compliance, and broader cross-border wealth structuring matters. By combining CSP, corporate, accounting under one roof, we help families create robust structures designed to protect and preserve wealth for future generations.

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